Investrust Bank Plc HY 2013 financial results


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Investrust Bank Plc listed on the Lusaka Stock Exchange has released its half year results. Check out
insights into this company in their presentation which appears below.
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Investrust Bank Plc HY 2013 financial results

  1. 1. INVESTRUST BANK PLC INTERIM RESULTS FOR THE SIX MONTHS ENDED 30TH JUNE 2013 Published in accordance with the requirements of Securities Act, Rule 17(2) of the Securities (Registration of Securities) Rules, 1993. UNAUDITED RESULTS STATEMENT OF COMPREHENSIVE INCOME Six months Six months to 30-Jun-13 to 30-Jun-12 K’000 ______________________________________________________________________________ INTEREST INCOME Interest Income 62,894 51,251 Interest Expense (28,273) (17,945) Net Interest Income 34,621 33,306 Other Operating Income 35,684 26,204 Net Interest and other operating Income 70,305 59, 510 Profit Before Taxation and extraordinary Items 7,228 7,174 Income Tax (2,530) (2,455) Profit attributable to Shareholders before Extraordinary Items 4,698 4,719 Extraordinary Items - - Profit attributable to Shareholders after Extraordinary Items 4,698 4,719 Earnings Per Share (EPS) K1.00 K1.01 Interim Dividend Per Share - -___
  2. 2. STATEMENT OF FINANCIAL POSITION K’000 ______________________________________________________________________________ 30-Jun-13 30-Jun-12 ASSETS Cash, Balances with Bank of Zambia & other Banks 170,760 159,718 Treasury Bills & GRZ Bonds 210,568 301,360 Loans and Advances (Net of Provisions) 680,771 447,292 Other Assets 119,841 71,280 Total Assets 1,181,940 979,650 LIABILITIES Customer Deposits 931,065 754,198 Other Liabilities 164,471 153,752 1,095,536 907,950 Shareholders’ Equity 86,404 71,700 Total Liabilities and Shareholders’ Equity 1,181,940 979,650 BANK PROFILE Investrust Bank Plc is publicly listed on the Lusaka Stock Exchange (LuSE). It is the only wholly owned indigenous bank in Zambia. The Bank currently has a network of 22 branches and 2 agencies across Zambia, and offers the full range of banking services and caters for customers across all economic sectors, including retail (individual clients, MSMEs), NGOs, parastatals, Government agencies and private corporate institutions. The Bank employed 432 staff as at 30 June 2013. FINANCIAL HIGHLIGHTS Statement of Comprehensive Income -4% increase in Net Interest Income -62% increase in Net Fees and Commission Income -23% reduction in Foreign Exchange Trading and Revaluation Income -18% increase in Total Operating Income -25% increase in Staff Benefit Costs
  3. 3. -27% increase in Administration and Other Operating Expenses Statement of Financial Position -21%growth in Total Assets -52% growth in Loans/Advances -23%growth in Customer Deposits -21% growth in Shareholder Equity REVIEW OF FINANCIAL PERFORMANCE Profit after tax for six months ended 30 June 2013 was K4.70 million (2012:K4.72 million). Net interest income increased by a marginal 4% to K34.62 million (2012:K33.31 million), whereas net fees and commission income increased by 62% to K29.56 million (2012:K18.30million). Profit on foreign exchange trading and revaluation declined by 23% to K6.13 million in 2013 (2012:K7.91million). Total operating income increased by 18% to K70.31 million in 2013 (2012:K59.5 million) while total operating costs increased by 21% thereby retarding potential growth in operating profit. The total operating income was negatively impacted by a sharp rise (58%) in interest expense in 2013 compared to 2012 on account of increased funding costs. The increase in operating costs was attributed to the continued increase in scope of operations with growth in the branch network and resourcing of support services. However, total actual operating costs were within budget. The balance sheet recorded considerable growth over the last one year period, with total assets increasing by 21% to K1 182 million as at 30 June 2013 (2012: K980 million). The growth in total assets was largely on account of increase in net loans and advances, fixed assets and receivables. Customer deposits grew by 23% to K931 million on 30 June 2013 (2012:K754 million). OUTLOOK AND PROSPECTS The future business prospects are largely dependent on the ultimate performance of the Zambian economy. The major economic fundamentals indicate a relatively strong local economy although there have been uncertainty surrounding the exchange rate stability during the whole of the first half of 2013 on the back of fluctuating and effectively dropping copper prices on the world market and limited local supply of foreign currency. The economy continued to record positive balance of trade, projected positive GDP growth and relative stability in inflation rate. These factors still instill confidence in the local economy which it is hoped would grow actively in the second half of 2013 and beyond. The various regulatory and/ or statutory changes effected end 2012 and beginning of 2013 did impact business volumes and margins in the first half of 2013. It is hoped that the situation will improve going forward as clarity on new business practices sets in following guidance provided on the statutes recently issued on the market. During the period under review, the Bank opened four (4) new branches; Lusaka (Mumbwa road), Choma, Kabwe and Ndola (President Avenue), increasing the total branch footprint to twenty two (22). Two (2) more branches are earmarked for opening by end of September 2013 in Mongu and Ndola
  4. 4. (second: Buteko Avenue Branch). There are also a number of other new branches earmarked for opening before the end of the year 2013. The product portfolio has been enhanced to include all commercial banking products addressing the needs of all clientele type. The Retail and Corporate and Investment banking units have been strengthened to better serve our individual, SME and corporate clients through a dedicated relationship management system and prompt customer service mechanism. We have enhanced out product offering on trade finance business to ensure value-for-money and efficient and convenient services in this arena. We anticipate growth in our operations as we consolidate our branch operations and increase product roll-out and reach to both existing and new clients. Management remains focused on achieving planned operating results through execution of its strategic objectives. CAPITAL POSITION The Bank maintained adequate capital during the period under review. Shareholder equity increased by 21% on account of retained earnings for 2012 and operating profit recorded in the first half of 2013. The Bank is on course with the capital raise exercise necessitated by the revision in primary capital and hopes to meet the new limit within the revised timelines prescribed by the Bank of Zambia. DIVIDENDS The Directors recommend that no interim dividend be proposed for the half year ended 30 June 2013. BY ORDER OF THE BOARD Cuthbert K. Tembo COMPANY SECRETARY/LEGAL COUNSEL